An energy economist, Wumi Iledare, has urged policymakers to adopt a broader, practical approach to Nigeria’s electricity challenges, stressing that lasting solutions require stronger economic and institutional sector foundations.

Mr Iledare, a Professor Emeritus of Petroleum Economics and Policy Research at Louisiana State University, U.S., made the call in an interview with journalists on Saturday in Lagos.

He said that ongoing efforts to improve power supply are important but need to go deeper to make a real difference in people’s daily lives.

Mr Iledare explained that electricity is not just about generating power but about ensuring it is affordable, consistent, and sustainable for households and businesses.

“Technology delivers electrons; economics determines whether those electrons are affordable, available, reliable, and sustainable,” he said.

The professor noted that frequent debates around electricity tariffs often miss the bigger picture, stressing that pricing alone cannot fix the sector’s long-standing issues.

“The affordability – availability -sustainability trilemma cannot be solved through tariff adjustments alone,” he said.

According to him, several connected issues, such as how costs are recovered, how the market is structured, fuel supply, transmission capacity, governance, and policy consistency, must all work together for the system to function properly.

Mr Iledare said that while initiatives like band-based tariffs were meant to improve service, they could only succeed if supported by a clear and well-organised market system.

He also emphasised that decentralising the power sector could create opportunities but must be carefully guided to avoid repeating existing inefficiencies at different levels.

“Without a coherent industrial policy and clearly defined market structure, fragmentation may simply replicate inefficiencies across multiple jurisdictions,” he said.

He drew attention to the different needs of electricity users, especially industries, noting that businesses rely heavily on stable power to grow and create jobs.

“Industrial consumers are not just electricity buyers; they are drivers of productivity and employment.

“Weak pricing philosophies distort incentives and undermine industrialisation,” he said.

Mr Iledare further observed that Nigeria might have moved too quickly into a liberalised electricity market without putting the necessary systems in place, which has contributed to current challenges.

“Sequencing matters. Liberalisation without adequate market readiness often leads to liquidity crises, stranded investments, and weak coordination, challenges Nigeria is currently grappling with,” he said.

He called for a more coordinated approach that connects electricity reforms with the country’s wider economic goals, particularly industrial growth and energy security.

“Electricity reform must go beyond privatisation and decentralisation. It must prioritise productivity, competitiveness, and national economic transformation,” he said.

Mr Iledare added that having a clear and consistent long-term plan for the power sector would help attract investment and improve service delivery over time.

He said aligning reforms with real economic needs would not only strengthen the electricity sector but also support Nigeria’s overall development. 

(NAN)